PBA Reporter
The Central Bank of Nigeria (CBN) has revealed that it will stop the sale of foreign exchange to Deposit Money Banks by the end of the year.
The CBN Governor, Godwin Emefiele, noted that the banks must begin to source their forex from export proceeds, hence the need to support non-oil exporters in the country.
Emefiele highlighted out that the decision was in line with the apex bank’s new commitment to boost the country’s foreign reserves through proceeds from non-oil exports.
Join our WhatsApp ChannelThe CBN made this known at a press briefing on the launch of the bank’s new forex repatriation scheme, RT200 held after the Bankers’ Committee meeting on Thursday in Abuja.
RT200 which stands for Race to $200bn is a set of policies, plans and programmes for non-oil exports that will enable the country to generate $200bn in forex repatriation, exclusively from non-oil exports, over the next three to five years, according to the governor.
Under the programme, which is to take effect immediately, the apex bank will provide concessionary and long-term loans for businesses interested in expanding existing plants or building new ones for the sole purpose of adding significant value to the non-oil commodities before exporting same.
The governor said the loans would have 10-year tenure, with a two-year moratorium and an interest rate of five per cent.
Similar to the naira for dollar programme, this programme, he said, would also entail a forex rebate scheme where the exporters will be paid N5 for every dollar they put into the economy.
The CBN governor said: “Today, we are also announcing the introduction of the non-oil FX rebate scheme, a special local currency rebate scheme for non-oil exporters of semi-finished and finished produce who show verifiable evidence of exports proceeds repatriation sold directly into the I&E window to boost liquidity in the market.”
He also said that the Bankers’ Committee would be partnering with state governments that have existing ports to achieve this goal, adding that the committee would provide a significant part of the funding needed for the project.
According to him, “The banks don’t have a choice and I said so this morning in the meeting, I said the era where because a bank needs $100m foreign exchange or $200m, they will bring the request to the CBN to fulfil, is coming to an end.
“Before or latest by the end of this year, (DMBs) will not come to the CBN for foreign exchange again. They should go and generate their export proceeds, fund people who want to generate non-oil export proceeds, when the proceeds come we will fund them at five per cent for you, the proceeds will earn rebates, that is how we can help you.”
“But when those proceeds come, sell the proceeds to importers; don’t come to the CBN for the dollars because we will stop providing. We will stop it.
He however noted that the banks might be able to access a portion of their forex demands from the CBN if they could provide impressive exports promotion records.
“Or maybe if they are lucky, if the bank approaches us for forex, if we see their exports records, we will give them five or 10 per cent of that request,” Emefiele noted
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